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Maybe a few of the new safeguards that the IRS put in place are helping. My client called the 800 number for ID theft victims and was able to positively verify her ID with the IRS through their series of steps. The IRS rep told her that the new safeguards had allowed the IRS system to catch the fraudulent return before it was processed so that at least our gov't didn't pay out funds to a thief in this case. It's still a PITA for her with taking the add'l steps to try to protect her identity but the thief didn't win.

No exclusion of gain under sec 121. I believe that is allowed only on U.S. property. Was there a mortgage on the property? As I understand it, there are 2 potential taxable components to the reporting of the sale of foreign property. Because the functional currency for citizens and green card holders is the U.S. dollar, you will have the capital gain on the sale of the residence and the exchange rate gain from paying off the mortgage in the foreign currency. You have to convert the purchase and any improvements or additions to basis using the exchange rate at the time each of these took place. Convert the sale price using the exchange rate at the time of sale to calculate gain. This gain, if any, is cap gain. If a loss, it's personal and nondeductible. Then if there was a mortgage on the property, the mortgage balance is calculated using the exchange rate at the time of purchase and recalculated again using the rate at the time of payoff. The resulting gain from the change in rate, if any, is taxed as ordinary income. Again, if a loss, it is nondeductible.

I love possums. Last year I was working late and heard a noise outside my door and opened it to see a possum knocking to get in. He didn't have a referral either, so we wished each other well and said a pleasant goodnight.

Back to the topic, almost no one gets in the door without a referral so those last minute price shoppers aren't much of an issue. If I don't recognize the name on caller ID, it goes to voice mail and only call those back that mention a referral or sound interesting.

I personally don't pay too much attention to who has what label and try to treat everyone here equally. I do get perturbed each and every time I see a comment about the CPAs though, because to the best of my recollection, none of the CPAs helping out on here has ever said or implied the reverse, you know, implying that that EAs (generally speaking) could be weak in some areas that we end up dealing with and asking questions about. Joan's post above was spot on, we don't go down that path on this forum.

Did you have to mention dogs and smoke detectors in the same post? lol My husband frequently sets off the alarm with his cooking because he burns things under the broiler, and now the dog practically panics when she sees him working around the stove or oven. The other night I was sitting on my outdoor office steps with with her in my arms and in stocking feet and no coat until that blasted thing stopped its chirping, and by then MY dinner was as cold as I was.

Or was it me?!!!! I'm on late at night also. I seem to be operating on West coast time, and I'm surviving on about 5 hrs of sleep a night at this point. Sometimes I might fall asleep and get back up to give the dog some medicine and I'll check in on the forum again at 2 or 3am.

We've had this discussion before and need to get away from who has what letters after each of our names. I continue to be offended by remarks that seem to indicate that a CPAs level of knowledge is somehow inferior to that of EA. To earn that designation, we had to have a college degree in the field, years work experience with %s in each area, as well as passing the exam. In addition to the area of tax, that education and experience gives a more well-rounded base of knowledge to be able to handle those entities that others of you struggle with. In addition to that, please keep in mind that many CPAs do choose to practice in only one area, and may choose to focus solely in the area of tax, just as you yourself have done. Also, many of us CPAs that do choose a tax-only focus have gone on to earn advanced graduate degrees such as a Masters of Taxation, and that includes some of our membership here. Please don't lump us all into one giant generalized melting pot that makes it seem inferior to your passing the EA exam. Truly, there are some on here with fancy letters after their names that can't seem to figure out how to Google or think to look in the forms' instructions! /rant

I spoke too soon. I just received my first reject in a few years, and it's one of my nice new clients that is a potential ID theft victim.

Tom is correct with his answer above, and your client was lucky to have sold it within the 1-year time frame required under code sec 1038(e). If he hadn't, that would have triggered some of the original gain that was excluded to be recognized on top of the gain he'll now have to compute. This doesn't apply to the OP's scenario, but if anyone is interested, here is a good article from the Journal of Accountancy explaining how gain recognition is triggered if the repossessed property isn't resold within the 1 year time frame. http://www.journalofaccountancy.com/issues/2014/aug/gain-exclusion-property.html

I'm sorry, Catherine. I can't imagine what you've been going through.

Maybe. Check this IRS page, last shaded box where it lists this as MEC: Other coverage: Certain foreign coverage Also, read in Pub 974, page 13, item 4a under "Other Coverage designated by the Dept of HHS": 4. Coverage under a group health plan provided through insurance regulated by a foreign government if: a. A covered individual is physically absent from the U.S. for at least 1 day during the month, or b. A covered individual is physically present in the U.S. for a full month and the coverage provides health benefits within the U.S. while the individual is on expat status.

I went into the season very tired already with all of mom's rehab problems (she's back to her own home and doing great now) and my ailing dogs. The returns have been mostly smooth sailing, picked up a few nice new ones, and no problems with software. The biggest pain has been one of my largest C corp clients that is negotiation a sale and is driving me crazy with requests for information, calls for explanations and clarifications, calls from their business broker, calls from their attorneys.

You're welcome.

I created a new topic and moved the posts about the driver licenses required for e-filing since it had diverged into something that others may find useful, not to be in an N/T topic. ~~sigh~~

JJ, below is a link to a pretty good article that explains the reporting and the problems related to a sale when the property with a life estate is sold while the tenant is still alive. The reporting is allocated between the tenant and the remainderman based on the IRS life estate table, and the remainderman won't be able to use the sec 121 exclusion on his share. Safe link to an article written by a lawyer, see item #2 under Disadvantages: http://www.susanmooney.com/?page_id=530

One of my larger C corps is at the tail end of negotiating a sale, and their tax attorney called last week asking if I was busy (why no, not at all) and if I'd explained about the pitfalls of C corps selling assets instead of stock. ERRRRRGGGG! is right! I told him it had been going back and forth since last Sept, and where had he been in all that mess?! Nonexistent, that's where.

Drake couldn't calculate it properly either. I hate all the calculations related to this. I had to manually calculate the limitations on my own returns because my husband turned 65 in Aug last year so he didn't meet the "last month" rule, and our HDHP went from family coverage for the first 7 months to individual coverage for only me for the last 5 months of the year. I hope I arrived at the proper limitations! It was a total PITA. Sorry for the rant!

Ah, yes, the old nightmares err, memories are coming back now.

He took off his shoes again! His wife even gave him a wondering look.

I remember that was an annoying problem in ATX. I used to override the lines on the front of the PA-40 to remove any entries and would have to delete those forms that the program kept trying to add back in. Since ATX got rid of most of the overrides, it is possible to code each of the entry to be Fed and resident state only? Drake doesn't have this problem.

There's one other point in the ACA regarding citizens living abroad that I found on the State Dept's site, and that is if the citizen is considered a bona fide resident of the foreign country for the entire tax year, then the person is considered to have MEC. There are different rules for determination of "bona fide resident" that use a lesser # of days for the presence test, the person must have a closer significant connection to the other country. It's covered here in pub 570. Maybe if you do some research on that premise, it will allow you to say that all of the family members have MEC for the year and be done with the issue. Have you actually asked the client if he has MEC for everyone for all 12 months, or are they covered by Singapore's system? FWIW, Singapore has a very successful gov't universal health system for everyone, but nothing is entirely free.

Is that with ATX software? Do you have an option checked so that the software requires you to include a phone number with each return. I used to never include the phone numbers. I've started adding them this year for my own benefit so that they shows up in the software's return manager.

I'm not *that* awesome; Google is a good friend. Pub 514 covers the exchange rate problem. From the contents, select the link to "Foreign Currency Exchange Rates" and read that and the section that follows entitled "Foreign Tax Redetermination".